RaceRadio you’ve become too personal. I’m not sure what’s going on here but you’ve appeared to have lost the plot. It makes me seethe as well that Armstrong acquired the $7m but it’s a fact. I can see you’ve taken a lot of time to put your post together but you’re still missing the obvious.
As I stated several times; I have no idea what Armstrong did with the $7m. I offered some potentialities that he may have taken. Or he may not have. He could have also lost $7m in the markets as well as making a lot of money.
You seem so hung up on trying to beat me at the internet that you’ve lost sight of the obvious point in all of this regardless of what investment structure Armstrong used.
I’ll try one last time.
The year 2007;
• Armstrong gives SCA $600,000
• SCA gives Armstrong $7,000,000
Difference;
Armstrong up $6,400,000
SCA down $6,400,000
2008, 2009, 2010, 2011, 2012, 2013 and 2014.
7 years on from the payout date.
Armstrong has the money and is free of interest or any repayment. 8 years, free money.
Therefore dependent on his investment strategy he is in effect investing “free money” into select markets and investments.
The Bloomberg Hedge Funds Aggregate Index is a poor choice in this given scenario.
Why you ask?
The index accounts for around 2500 different funds. Therefore I’m not sure why you’d attempt to use that in for this specific model. Simply by the fact that even with a free $7m courtesy of SCA you wouldn’t’ be investing in 2500 funds simultaneously over a given 8 year period! To do that you’d need $2.5 trillion dollars. That is why it’s called the “aggregated index” – as it combines almost all publicly known funds to give the an indication of how the market is performing in totality.
The most important part and what you have missed is “-1.8%” is not its present value or indicative of any other given period in time. The -1.8% refers to
“from the peak of the market in 2007”.
That’s 2500 funds in 2007 (if they still exist) to the value is it today. 1.8% down across 2500 funds. However that is market peak; what was it between 2008 and 2009 or between a 3 month period or 6 month period?
Most importantly the markets in 2007 were at a global historical high. Being down from that period is actually not a bad thing.
It doesn’t mean individual funds are losing money.
Does that make sense? The funds are not losing money but their total gains are down from a global historical high. See graphic below.
Now the other key here is depending on your strategy you wouldn’t look at aggregated list of 2500 funds. You’d look at the index that matches your investment strategy. There are 100’s of different indices. So if you were investing in Middle Eastern Funds only you may choose to use those specific indices. Or maybe India? As well as other financial research materials.
Here you can see a list of more specific indices that can be used to judge potential performance per specific investments strategies:
https://www.hedgefundresearch.com/hfrx_reg/index.php?fuse=login&hi
Additionally if you want to get real specific you can:
https://www.evestment.com/resources/indices/hfn-indices-methodology-and-description
Per Elevation Partners, it’s a good example. As I stated it was losing year on year. Bono was labeled the worst investor of the year! However market timing is everything. So if you put your investment into their fund prior to their investment in Facebook then you’re looking at percentages beyond the realms of believability.
http://www.inc.com/maeghan-ouimet/bono-scores-big-on-facebook-investment-elevation.html
Timing. This is what fund managers and investment strategists do. Hoards of young 20 something hunched over keyboards into the early hours of the morning attempting to predict where and importantly when to move money. Again you’ve simply taken the figure of EP and multiplied it across the timeframe. As ChrisE has kept trying to tell you. Investors with the sums of money Armstrong had don’t simply “park” their money in one fund or 2500 funds simaltaniously. Again timing.
Per CD its not something someone with $7m would do. As I explained I was showing it for demonstrative purposes. That by simply parking the entire $7m he’d earn 3% for doing nothing - $2m for free on your already free $7m! Simply by giving it to the bank. Easy money. On-line you can get a 5-year CD at 2.5% so as 7 years and actually speaking to the bank you’d get 3%+, easy.
Whilst I appreciate the effort you’ve put in to this but investments, mathematics and business strategy is clearly not something you’re very good at. Sorry. It’s embarrassing to be honest. You’re a smart guy but you’re just trying to beat me at the internet whereby you have little knowledge of the given subject.
I enjoy the debate but you’ve veered the topic off track because you’re angry at realizing Armstrong has probably gained more than he will lose at the table with SCA.. It sucks. I hate it too. But that’s life. The thread was discussing some good information and you've hijacked as you want a battle with me. Lets drop it.
To summarize;
• SCA gave Armstrong $6,400,000 for free.
• He has had that money for 8 years and counting with zero payments or interest.
• The Bloomberg Aggregate Index contains 2500 funds.
• No one person could possibly invest in all 2500 funds at one time.
• -1.8% value was measured from the peak of 2007. It is not its present day value.
• Investors select investments and funds based on a given strategy.
• Some funds have made 40% or more in 1 year. There are ones that have made 80%.
• Some have also lost. Lost big. 80% in one year.
• Timing in the market place is very important. When your money enters and when you take it out.
• Armstrong may have invested his $7m and lost it all. That is also possible.
Per the 1.8% point; this picture will help you. See where the Bloomberg index its at? 1.8% down from its peak in 2007. But its still providing significant returns. Addtionally imagine if you invested the money when the markets were rising in 2008
Hope all this helps. But prefer if you just left the topic alone. Enough is enough.
Race Radio said:
The Bank of Hog claims that is is easy to turn $7,000,000 into $14,600,000 in 8 years. He does deals like that all the time. Easy for a big time player like Hog
Bank of Hog gives Elevation Partners as an example of how easy it is to make 15%. Hog claims they were "Well above average, well above" .....Their average annual return? 11% (Correction, it is
actually 9%). Poor Hog can't tell the difference between investor inflows and investment performance. Hey, that's what happens when you are a fake banker
http://online.wsj.com/news/articles/SB10001424052702303812904577291901182429724 Bank of Hog Claims he can get offer 3% on a CD at BoA.....but their best rate on a Jumbo CD is nothing close to that. Bank of Hog claims Lance can "Offshore" His money and make15%.....unfortunately he does not realize that Hawaii is still part of the US Bank of Hog raves about how easy it is to make 15%. Even though The Bloomberg Hedge Funds Aggregate Index is down 1.8 percent from its July 2007 peak. Averages don't mean anything to Hog. Averages are for amateurs. Hog is a professional.......professional pretend banker.
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